Thursday, December 31, 2009

Simoni Non Va in Pensione. Who's to Blame?


Contrary to earlier reports, 38-year-old cycling malcontent Gilberto Simoni (pictured right) is not retiring. Velonews.com reports that the former Giro d'Italia winner has signed, or is about to sign, a one-year contract with the new Estonia-based continental team of Merdiana-Kamen. When asked for his comments on the report, Simoni blamed Damiano Cunego (not pictured) for preventing him from retiring.

Predictions for 2010 (or, How to Use Probability Theory to Your Advantage)

I do not make predictions myself, but I have some recommendations for those of you who do. If you want to make sure that you're predictions are never "wrong," simply assign some probability and/or confidence level to your predictions above 0 but below 100%.

Here's how it works. Suppose you want to predict that the Cubs will win the World Series in 2010. Normally, we would say that anyone who would predict that must be an idiot. The prediction is bound to be wrong based, apparently, on the laws of physics. However, the predictor can protect himself or herself by using the following formula: "I am 97% confident that the Cubs have a 26% chance of winning the World Series in 2010." Then, no matter what happens, the prediction was not "wrong." If the laws of physics abate and the Cubs do win the World Series, then the predictor looks like a genius. But even if the Cubs lose, the predictor can say, "Well, there was always a 74% percent chance they would do so, and perhaps even more given that I was not completely confident in the probabilities I was assigning." In fact, the prediction is perfectly consistent with the Cubs extending Milton Bradley's contract for another 10 years and ending the season with a record of 0-162 (or worse).

Bottom line: Assigning probabilities to your predictions will ensure that you are never "wrong." You will be able to claim that all of your predictions were accurate, thus infuriating your friends and alienating family members.

Another alternative for predictions is to make them as normative assertions, such as the following:

The Cubs should win the World Series in 2010.
Iran should give up its nuclear program in 2010.
Dick Cheney should shut up in 2010.
Nancy Pelosi should get the hell off my television screen in 2010.

Again, no way anyone, with the aid of hindsight, could accuse you of making a "wrong" prediction, when Nancy Pelosi appears on television on January 1 to wish you, personally, a Happy New Year.

Cycling 2009: My Year in Review

I had two goals for 2009: to keep up with the fast guys on training rides and the Ride Across Indiana. I managed the first (by mid-summer anyway), but didn't manage the second due to unforeseen circumstances. Anyway, here are some stats for 2009.

Number of rides: 209
Total miles: 5,285 (personal best)
Time on bike: 293.25 hours (personal best)
Average ride distance: 26 miles
Highest average speed: 22.7 mph
Max speed: 48.2 mph (personal best) (downhill)
Number of crashes: 0 (personal best)

Wednesday, December 30, 2009

Bands with Three Stellar Guitarists (Not Necessarily at the Same Time)

I can think of two:

The Yardbirds: Eric Clapton, Jeff Beck, and Jimmy Page.

James Gang: Joe Walsh, Dominic Troiano, and Tommy Bolin.

Can anyone think of others?

In case you don't remember Tommy Bolin, listen to his epic solo on "From Another Time" from the James Gang Bang album. His fusion work on Billy Cobham's Spectrum album is also damn impressive. You can listen to "Quadrant Four" from that album here. Unfortuntately, like his own hero Jimi Hendrix, Bolin died too young - age 25 - of a drug overdose.

When the Ball Drops in Times Square...

... it will be powered by energy stored up from these stationary bicycles provided by Duracell.


















Hat tip: Engadget.com

What I'm Reading Now

I've come down with a bit of a head cold, which means extra time for reading while I tried to rid myself of the bug. Here's what I'm reading:

Anthony Scott, The Evolution of Resource Property Rights (Oxford 2008). Scott is among the pioneers of  modern resources economics, publishing important work on fisheries in the mid-1950s. This recent book is the culmination of all his work, running the gamut from water resources to forests and minerals. He has a very impressive grasp of the legal structure of property rights in resources, with one glaring exception: he conflates common property with open-access. But for that problem, this book could have been written by a law professor (which at least in this context is intended as a compliment).


Chris Wickham, The Inheritance of Rome: Illuminating the Dark Ages, 400-1000 (Viking 2009). Tyler Cowen of Marginal Revolution says this is one of the best history books he has read, ever. So far, I'd have to agree. Wickham amasses impressive archaeological and documentary evidence to challenge the conventional wisdom that the "Dark Ages" were a period of cultural decline. I'm learning a lot from this book.




Douglass C. North, John Joseph Wallis, and Barry R. Weingast, Violence 
and Social Orders: A Conceptual Framework for Interpreting Recorded History (Cambridge 2009). An innovative history of political economy that distinguishes how different kinds of political structures deal with the problem of social ordering to control violence. Most societies, which the authors call "natural states," limit violence by political manipulation of the economy to create privileged interests. These privileges limit the use of violence by powerful individuals, but doing so hinders both economic and political development. In contrast, modern societies create open access to economic and political organizations, fostering political and economic competition. The book provides a framework for understanding the two types of social orders, why "open access societies" are both politically and economically more developed, and how some 25 countries have made the transition between the two types. In several respects, this book is a culmination of problems Doug North has been examining for the past 40 years.

Tuesday, December 29, 2009

Schelling on the Dangers of Nuclear Disarmament

In the Fall 2009 issue of Daedalus, Tom Schelling explains cogently why a world without nuclear weapons would not necessarily be safer world. After all, we cannot dis-invent nuclear weapons, which means that the capable of rearming will remain; and existing nuclear powers can be expected to have rapid rearmament plans in place, should conflicts arise, to ensure that they are not left exposed should their adversaries rearm. The first to rearm might, after all, have an incentive to undertake a preemptive nuclear strike in the absence of deterrence. Thus, ironically, complete nuclear disarmament could increase the risk of  nuclear war.

Schelling's article is a direct and persuasive response to a series of op-eds in the Wall Street Journal, by what Schelling terms the "unexpected combination" of Henry Kissinger, William J. Perry, George Schultz, and Sam Nunn, who advocate for complete nuclear disarmament (see, e.g., here and here).

Schelling's 2005 Nobel Prize lecture focused on the fortuitous but seemingly durable "taboo" that has surrounded the use of nuclear weapons since Hiroshima and Nagasaki. The lecture can be read here, or viewed here.

Hat tip: Marginal Revolution

The Biggest Part of the Climate Change Problem

As Nancy Birdsall, Dan Hammer, and Arvind Subramanian remind us in this paper posted on the VOX blog, more than one billion people on earth still live without basic electricity, and it would be completely unrealistic to expect that many, if any, of them would be content to remain in that condition over the next century. Which means that electricity use, and resultant carbon emissions, are inevitably going to rise in countries where those people live. The rich countries of the world can demand all they want that developing countries commit to binding greenhouse gas emissions reduction; it's not going to happen. That is what I call an "inconvenient truth."

It may be possible for developing countries, with the assistance of developed countries, to minimize their increases in carbon emissions from growing electricity use. But carbon emissions are going to increase from developing countries over the next 30-50 years (at least), and arguably should increase not just for purposes of their own economic development, but because economic development could well reduce their costs of adapting to higher mean temperatures. That is to say, ironic as it might sound, the best climate policy for the least developed countries is to develop more quickly, even if that means substantially increasing their carbon emissions. This implies, of course, that developed countries will have to reduce their own carbon emissions far  more than they would if emissions from the least developed countries could be expect to remain constant or fall.

So, what can be done? First of all, we have to distinguish between relatively wealthy developing countries, such as China and India, which contribute significantly to the current flow of greenhouse gases into the atmosphere from other developing countries, which are much poorer and which contribute very little to total global emissions. But even in the case of China and India, we cannot expect them to actually reduce emissions in the near term. After all, that at least 130 million Chinese still live on $2/day or less. The most we can reasonably expect them to do is slow the rate of increase in emissions per unit of economic growth. More generally, it might also be useful, in calculating emissions and targeting reductions, to focus on emissions per capita and per unit of economic growth, rather than simply total emissions.

In the final analysis, the climate change problem is not just about reducing concentrations of greenhouse gases in the atmosphere. It is about doing that while maintaining adequate energy supplies for production in developed countries and increasing energy supplies in developing countries. To accomplish these multiple and seemingly inconsistent goals will ultimately require technological breakthroughs that are not certain to occur within any given time frame. But those technological changes certainly will not occur unless and until the prices of carbon-intensive energy resources, such as coal and oil, are raised and stay high.

Monday, December 28, 2009

The iPhone as Bike Computer

Pedal Brain turns your iPhone into a Cycling Computer. Looks very cool.


Which Author Sold the Most Books in the "Noughties"?

This one's way too easy.

















According to The Guardian.co.uk, JK Rowling sold more than twice as many books (more than 29 million) and earned nearly 10 times more money (nearly 226 million pounds) during the decade than the second top selling author (Roger Hargreaves).

Fabian Cancellara


PezCyclingNews.com has an excellent feature on the great Swiss cyclist Fabian Cancellara, who owns the race of truth - the time trial.

Feeback Loops of Climate Policy Failures

They say that success breeds success. Does failure similarly breed failure? Congress's failure to enact domestic climate change legislation was arguably one of the factors that made it highly unlikely that the parties at Copenhagen would commit to a successor to the Kyoto Protocol. Now, it appears, the perceived "failure" of Copenhagen may imperil the ability of Congress to enact domestic climate legislation before the mid-term elections in November 2010.

According to a report at Politico.com, a half-dozen Democrats in the Senate, including Evan Bayh of Indiana, Mary Landreiu of Louisiana, and Dick Durban of Illinois are now asking the White House to jettison the cap-and-trade measures in the energy bill. They give various reasons, most of which relate to the economic recession and the fact that 2010 is an election year. However, it seems likely that they wouldn't support climate legislation in any year, regardless of economic circumstances. One factor, above all, would seem to be highly relevant to their opposition:  Illinois, Indiana, and Louisiana are three of the top ten states in total greenhouse gas emissions, according to a Congressional Research Service report, which means that any regulatory system is likely to carry significant economic impacts for those states.

Senator Bayh has been on the record stating that he would not support legislation that would disproportionately impact heavy coal-using states, such as Indiana. Frankly, there is no climate legislation that would not disproportionately affect heavy coal-using states because coal is the most carbon intensive of fuel sources. The whole point of climate legislation is to raise the price of using carbon-intensive fuels, like coal and oil, to better reflect their social costs, and to stimulate market processes to ultimately replace those fuels  with less carbon-intensive substitutes.

Bayh can claim that he is taking a principled position to protect electricity users in Indiana, who currently benefit from relatively low rates because coal is an inexpensive fuel source, which is mined in Southern Indiana. What he won't acknowledge is the difference between the price of coal and its social cost. He also will not admit that his opposition to climate legislation benefits not only electricity users, but coal mining and other coal-dependent industries in the state that are among his many contributors.

Similarly, Mary Landrieu has consistently voted to support the oil industry in her state (see here). The oil & gas industry was one of her top-four contributors, by industry, between 2005 and 2010. Entergy Corp gave her more money during that period than any other single contributor. Her opposition to climate legislation is bought and paid for.

Finally, it is worth nothing that Bayh, along with other Democratic hold-outs from states that emit a lot of greenhouse gases, sent a similar message to the White House near the end of the Bush Administration, in opposition to the Warner-Lieberman climate bill. So, really, nothing much has changed in the domestic politics of climate change.

Sunday, December 27, 2009

Jets 29 - Colts 15

The Colts brain trust chose to lose to the Jets this afternoon, removing most of the starters on both offense and defense in the middle of the 3d Quarter, while the Colts still held the lead. In the past, this strategy has not helped the Colts come playoff time. I don't understand why they think it will work any better this season. Not playing to win is demoralizing to players. Once the rhythm of winning is disturbed, there is no guarantee that it will return; it's not something that can be turned on and off like a switch. I would not be at all surprised if the Colts lose their next two games, including their first of the playoffs. Even if they do lose early in the playoffs, yet again, I expect that GM Polian and Coach Caldwell will insist that their strategy remains correct, and that they would do the same again.

By the way, we learned one other thing today: Curtis Painter is not an NFL quarterback. He was like a deer in the headlights, had no clock in his head for releasing passes, and showed no ability to read defensive coverages.

Oh yes, we learned one other thing as well: If you don't at least try to block Dwight Freeney, he will sack your quarterback.

Arsenal Imperious

Great game today, as the Gunners beat a very good Aston Villa side 3-0 at the Emirates Stadium. After a tense first half, Wenger brought on Cesc Fabregas early in the second half. Fabregas, just coming off a hamstring injury, changed the game, scoring a beauty from a free kick and another from a clinical counter-attack. Unfortunately, he seemed to tweak his hamstring again on the second goal, and had to be substituted. Still, not a bad day: 2 goals in 28 minutes. I only hope the cost wasn't too high; Arsenal cannot afford to be without Fabregas for long. Abu Diaby added another fine goal on a solo run from the center circle, curling the shot around Brad Friedel as Villa's tired defense backed off of him.

The victory saw Arsenal leapfrog Manchester United into second place in the Premier League table, only 4 points behind Chelsea, who drew yesterday at Birmingham City. Chelsea have played one more game than Arsenal. Man.U. play Hull City later today.

A toast to the Gunners (with one of my favorite beers):



 

Saturday, December 26, 2009

Last Things

I just finished reading the last novel of C.P. Snow's Strangers and Brothers series. Of the final three novels in the 11-part series, I enjoyed Corridors of Power (the ninth) and Last Things (11th and last) better than The Sleep of Reason, which was quite bleak. But it was all a joy to read. Indeed, I am sure I will never forget the experience of reading it. I am reminded of younger days when, after closing the back cover of David Copperfield or Great Expectations, I experienced a feeling of palpable loss - that I would never again meet those wonderful characters to whom I had grown attached. Being older now, I am not so prone to such maudlin sentiments. Still, I will remember fondly Lewis Elliot, his first wife Shelia, second wife Margaret, brother Martin, Roy Calvert, Francis Getliffe, George Passant, Arthur Brown, Roger Quaife, Walter Luke, and others. One advantage of a series such as Strangers and Brothers - or Harry Potter for that matter - is that the author can develop the characters in a more realistic, leisurely fashion, as they are perceived not just by one other character or narrator, but from a variety of  perspectives, and over time.

I would certainly recommend Strangers and Brothers to anyone who enjoys twentieth-century English literature. If you do decide to read Snow's magnum opus, I strongly recommend reading it in order, from Years of Hope (though it  was not the first book in the series to be published) through to Last Things

Spinning in Bob's Basement

With Bob Brooks, Karl Raynor, Tim Wozniak, Larry Stevens, Adam Perler and Mark Cline. I think I suffered least today because I was dogging it.




Time to Work Off Some of Those Holiday Calories





Friday, December 25, 2009

The "Noughties": My Most Productive Decade (So Far) as a Scholar

4 books
22 articles, chapters, and essays
3 book reviews
3 short, periodical articles

I wonder whether I can sustain that level of scholarly production over the next decade.

Brights



It seems like as good a day as any to put in a plug for Brights.net, a group which espouses a naturalistic worldview, free of supernatural or mystical elements.Other members of Brights.net include Daniel Dennett, Richard Dawkins, and Steven Pinker.

My Holiday Haul

The complete 4-volume set of Winston Churchill's History of the English Speaking Peoples; new pjs; lots of chocolate; and an electronic foot massager. Great presents all, but I was hoping for an automatic book writer. Well, maybe next year.

Thursday, December 24, 2009

Albus and Bentley

Here's the pup, Bentley, snuggling with his older "brother," 8-year-old Albus, who is a flat-coated retriever.


New Addition to the Family

This is Bentley, a Spaniel mix we picked up from the shelter last week. He is 8 weeks old and very busy.


Stefan's First Road Bike


One of My Favorite Cheap Trick Songs

Robin Zander Can Belt with the Best of Them

The Silly Season of Lists, Lists of Lists, and Lists of Lists of Lists

A day before Christmas, and I'm already listed out. Too many rankings of best and worst movies, books, and films; most important celebrities; most influential people (often indistinguishable from most important celebrities); most important new gadgets; most significant new buzzwords; best advertisements; and the lists go on. Not only is it the end of a year, but the end of a decade. So, in addition to the best of, worst of, most interesting, least interesting, etc. lists for 2009, we also have similar lists for the decade. We also have mini-versions of rankings for various subcategories, e.g., the 50 most important Romanian films of the "noughties."

Generally speaking, I don't have much time for such lists. I think I appreciate their mass appeal, and their twin purpose of alluring and provoking readers (by what the lists exclude). I just don't find much utility in finding out what x thinks were the "best" or "most important" films, books, or anything. Nor am I inclined to publish such lists myself. My son, Stefan, sometimes attempts to engage me in such rankings, and I usually decline, saying something like,  "No, I don't have a favorite Beatles' song" or "Sorry, I can't tell you whether I like John Stewart better than Stephen Colbert." I will tell him what I like, or dislike, about any particular Beatles' song; I may even give him a short unranked list of various Beatles' songs I like a lot. I have even been known to volunteer that "Why Don't We Do It In the Road" is among my least favorite Beatles' songs. But I remain generically opposed to rankings, as if anyone could provide objective reasons for preferring "A Day in the Life" to "Something."

Humbug.

One of the Best Things About the Holidays

Hearing from old friends, with whom I don't often catch up. College friends like Jim Kerman and Peter Marston. Friends from Cambridge days, including Sanjay Peters, Ian Hodge, Malcolm Grant, Timo Goeschl, and Massimo Bianchi. They all bring back great memories, and remind me that our friendships endure. I just wish I could see them all and spend some time with them.

Wednesday, December 23, 2009

Happy Festivus Everyone!

Festivus ("for the rest of us") is celebrated on Dec. 23d each year. The main parts of the celebration is the erection of an aluminum "Festivus Pole" and the "airing of grievances" for the disappointments of the preceding year around the dinner table. For more on the celebration of Festivus, see the Wikipedia entry.




The Utility of Hold-Outs

Over at Marginal Revolution, Tyler Cowen has an interesting post about how the behavior of hold-outs Joe Lieberman and Ben Nelson in the Senate might actually smooth the path to reconciliation of House and Senate version of health care reform legislation because the hold-outs create a "credible precommitment to no further negotiation." That may make reconciliation easier because House members of the conference committee will appreciate that they must make the concessions, if the product of reconciliation is to have any chance of passing in the Senate.

The is just one small problem with this argument: Senators Lieberman and Nelson were holding-out from the cloture vote, which requires a majority of 60. After reconciliation, the bill would pass with just a bare majority (51 votes), so the reconciled bill could lose 9 votes in the Senate, including Lieberman's and Nelson's, and still pass. House members will appreciate this and will propose marginal changes in favor of the House version, so long as they expect those marginal changes to maintain a bare majority of Senate approval. So, for example, I would fully expect the conference committee to throw out the special Medicare funding deal Senator Nelson negotiated for his state, Nebraska. That amendment would cost, at most, one vote in the Senate. Likewise, any amendments that only Senator Lieberman demanded are in jeopardy.

Specialized Sets Out to Build the Most Uncomfortable Looking Tandem Bike in the World, and Succeeds!



















Photo from BikeRadar.com

Tuesday, December 22, 2009

Who's to Blame for Copenhagen's "Failure"? Redux

China, according to Mark Lynas, writing in The Guardian.

Lynas, who was present at the meetings where the the final "Copenhagen Accord" was forged, drops this bombshell:
[I]t was China's representative who insisted that industrialised country targets, previously agreed as an 80% cut by 2050, be taken out of the deal."Why can't we even mention our own targets" demanded a furious Angela Merkel. Australia's prime minister, Kevin Rudd, was annoyed enough to bang his microphone. Brazil's representative too pointed out the illogicality of China's position. Why should rich countries not announce even this unilateral cut? The Chinese delegate said no, and I watched, aghast, as Merkel threw up her hands in despair and conceded the point. Now we know why – because China bet, correctly, that Obama would get the blame for the Copenhagen accord's lack of ambition.

Monday, December 21, 2009

Economists' Letter to Senator Reid

The WSJ Blog reports on, and provides the full text of, a letter from two dozen notable economists, including three Nobel laureates, thanking Senator Harry Reid for his leadership on the Senate health care bill. The letter, which is signed by Kenneth Arrow and Robert Solow, among others, concludes that the compromise Senate bill "will move our nation's health care forward while helping to control health expenditure growth."

Arrow, Solow, and the other signatories are light-years smarter that I will ever be, but I still don't see how the government can extend insurance coverage, require insurance of preexisting conditions, etc., without either somehow rationing care or raising costs. Which is not to say that I am against health care reform.

The Right to Travel, Airlines, and Newt

Although the text of the US Constitution does not explicitly guarantee it, the US Supreme Court has long recognized a constitutional liberty to interstate travel. See, e.g.US v. Guest, 383 US 745, 764 (Harlan, J., concurring). Unfortunately, nothing in the Constitution or Supreme Court doctrine prevents the airlines from discouraging a citizen from exercising that right.

Today, the Transportation Department announced a new rule that limits to 3 hours the amount of time airlines can violate the Geneva Conventions hold passengers hostage on the tarmac without giving them an opportunity to deplane. I predict that Liberals will argue that the rule should have been stronger, limiting hostage holding to only 1 hour. Conservatives, meanwhile, will argue that the rule itself violates the constitutional liberty of airline corporations to hold passengers hostage.

In a related note, according to Brad DeLong's blog, Newt Gingrich suggested that the snowstorm that grounded thousands of flights along the Eastern seaboard yesterday was a message from God denouncing the  Copenhagen climate negotiations.

The Blame Game and "Climate Realpolitik"

Jeffrey Sachs of Columbia University's Earth Institute is blaming President Obama (here) for subverting international negotiations at the Copenhagen climate meetings. Meanwhile, the UK's Secretary of State for Energy and Climate Change, Ed Miliband, blames China and other developing countries (here). Both are right, and both are short-sighted.

Sachs is right that Obama, in essence, has embraced the Bush Administration's real politque approach to climate negotiations, which rejects the all-embracing, comprehensive approach of the UN Framework Convention on Climate Change and Kyoto Protocol, in favor of negotiating only with the big boys - the major GHG emitters - to minimize rent-seeking by developing countries among other collective-action problems. (Obama's approach is distinguished from the Bush Administration's efforts, however, by his apparent sincerity about achieving meaningful GHG emissions reductions.)

Meanwhile, Miliband is right that China is playing a not-so-subtle game, seeking to create an impression that it is making meaningful commitments without subscribing to international institutions that would make those commitments credible. Neither the US delegation nor the Chinese delegation showed much concern in Copenhagen for the interests of Bangladesh, the Tuvalu Islands, or African countries that are most at risk from climate change. Then again, those countries (with the notable exception of Brazil) did not greatly influence the structure of the Framework Convention on Climate Change or the Kyoto Protocol either.

In sum, I think Sachs and Miliband are both a bit unrealistic and short-sighted because (a) there is little reason for anyone to believe that more or better could have been accomplished at Copenhagen (in the absence of a credible commitment from the US, in the form of climate legislation) and (b) what did happen at Copenhagen - including  President Obama's insistence on the verifiability of emissions reductions from all countries, and China's belated concession (even if it was "cheap talk") of the need for greater "transparency," bodes well for future negotiations of a more realistic and effective climate treaty. It signals the emergence, as Jesse Jenkins at The Energy Collective has noted, of a new "Climate Realpolitik."

Realistically, we will not know whether the Copenhagen negotiations were a success or failure for anywhere from one to three years (if then). But their success (or failure) definitely does not hinge on whether or not the parties ultimately extend existing institutions from the Kyoto Protocol, which has itself been a remarkable failure. Whether Kyoto lives or dies is not the issue. The issues are whether (a) the world's leading greenhouse gas emitters can agree to real and verifiable emissions within deadlines to limit the total amount of  global warming over the next century to reasonably safe levels, and (b) the international community as a whole can agree to mechanisms and a funding formula to assist developing countries avoid or bear adaptation-related costs. Neither of those things was ever likely to be settled at Copenhagen.

UPDATE: Over at the Becker-Posner BlogGary Becker and Richard Posner both label Copenhagen a "failure." Becker seems semi-relieved; Posner, who believes that abrupt climate change is a serious threat, and not just in the long run, is not. Obviously, given what I wrote above, I agree with Posner that rent-seeking games are being played out. I also agree with Becker that developing countries, including China, are going to have to be "paid to play." So, on what basis am I less concerned about the outcome of Copenhagen than either Becker or Posner? Good question (if I do say so myself).

Scientists as Political Activists

Tim Haab, over at Environmental Economics blog, has had some interesting posts lately about the blurring of science and politics. Today he expresses concerns (here) about scientists who start advocating policy positions:
My concern is not that scientists are biased.  Quite the contrary, most scientists I know are painstakingly objective.  Despite that, once a scientist publicly advocates a position--even if that position is founded in fact based on the current state of knowledge--that scientist is likely to succumb to the natural tendency to turn that position into desire and defend that position selectively and vehemently.

That is where we are in the climate change debate.  Two sides, with ardently staked positions, selectively choosing 'facts' to support that predetermined position and raging against the 'facts' in disagreement.
Science is better than that.
Haab's right: science is better than that. But scientists are not, never have been, nor, arguably, should they be expected exist beyond politics.

Why should natural scientists, any more than social scientists (including economists), be barred by their work from advocating for positions they believe in? In fact, there is a long history of political advocacy by scientists. It is worth recalling that Linus Pauling won two Nobel Prizes, one for chemistry and the other for peace. Albert Einstein famously wrote to President Roosevelt, first, to advocate the building of an atomic bomb out of concern that Germany was already trying to do so, and later, to advocate against using the atomic bomb. J. Robert Oppenheimer - scientific director of the Manhattan Project - outraged many politicians by his political statements during the Red Scare, and eventually had his security clearance revoked.

Scientists should not be expected to fly above the political fray. They should, however, be expected to keep their science as free as possible from their own political biases. This, I take it, is the most we might legitimately and realistically expect. But even when scientists - like other fallible humans - fail to keep their science separate from their politics, the scientific method itself provides something of a check. Because science is a competitive enterprise, if one scientist achieves dubious results based on a flawed methodology, data mining, etc., whether by accident or political motivation, other scientists will sooner or later reveal the flaws through their analyses of methods, efforts to replicate findings, etc. Simply put, politicized science will ultimately be repaired by more and better science. And scientists who falsify findings or purposefully bias their analyses sooner or later are publicly shamed. The risk of shame alone, I believe, provides a reasonably strong incentive for most scientists to be careful in their work and parsimonious in the conclusions they draw from it.

All I Want for Christmas

A few days of temps above freezing, dry roads, and no wind. Is that too much to ask?


Sunday, December 20, 2009

"Sufferfest"

We had a group "sufferfest" workout at Bob Brooks's house this afternoon. Literally. It was "The Sufferfest" training video, "Downward Spiral" (see below) with intervals using video clips from Paris-Roubaix and other Spring Classics. Thanks to Bob, David, Jonas, Mark C., and Larry. Without them, I would not have been able to put myself through that much suffering.

Eggert on Warming

Not global warming, but Jens Warming, an early property-rights economist who studied fisheries decades before the more famous contributions of Anthony Scott and Scott Gordon. Here is the abstract of Eggert's article:
This article summarizes the contribution in fisheries economics by the Danish economist Jens Warming and gives a translation of his article "Aalegaardsretten" (The Danish Right to Eel Weir, 1931). Warming, provides an early reference on the problem of open access, precedes Arthur Pigou in suggesting an optimal tax as a correction measure, which I refer to as a Warming land tax in fisheries, and explains how property rights in fisheries will lead to maximized resource rent and prevent overfishing. What is missing in Warming's description of the problem is the dynamic aspect and that the economics of natural resources should be analyzed in a capital theoretic framework, which was later established by Anthony Scott (1955a; 1955b).
 The translation of Warming's 1931 is particularly welcome. One weakeness in Warming's treatment that Eggert neglects is the failure to recognize potential common-property solutions to overexploitation of fisheries. However, as Eggert argues, Warming clearly deserves more recognition that he has received.

Good Week for Gunners


Arsenal took 7 points from three matches (two wins, one tie) in the last week. Meanwhile, Manchester United and Chelsea, the two teams ahead of them in the Premier League table, faltered a bit. Man U took only 3 points from two matches (a win and a loss), while league leaders Chelsea took 5 points from 3 matches (a win and two ties). As of now, Arsenal sit 6 points behind Chelsea and just 2 behind Man U, but Arsenal have a game in hand (that is, they've played one fewer game than their rivals). Should they win that game, they'd leapfrog Man U into second position, just three points behind Chelsea with about half the season still to play. Bottom line: The Gunners are very much in the hunt for silverware this season.

Happy Birthday Billy Bragg!

What's Not Clear About "Thou Shalt Not Steal"?

Margo Rabb, writing in this morning's NY Times, notes that book theft has increased during the recession. That, in itself, is not surprising. What does surprise me is the book of choice among shoplifters:

At BookPeople in Austin, Tex., the rate of theft has increased to approximately one book per hour. I asked Steve Bercu, BookPeople’s owner, what the most frequently stolen title was.
“The Bible,” he said, without pausing.

Saturday, December 19, 2009

Change Happens

Six or seven of my cycling teammates, all Cat 3s, have announced that they're leaving to join a new team. Among them are a couple of close friends. I am saddened that they will no longer be my teammates. But, of course, they remain my friends, and I look forward to sharing many training rides, and an occasional libation, with them next season and beyond. I wish them all the best on their new team, just as I do for all the racers (and non-racers) who remain my teammates.

Friday, December 18, 2009

A Pleasant Surprise, a Predictable Response, and a Weak Compromise Accord

I was pleasantly surprised that President Obama's speech to the delegates gathered in Copenhagen stressed the importance of monitoring greenhouse gas emissions from all countries, including developing countries that are paid by developed countries for their mitigation efforts:
we must have a mechanism to review whether we are keeping our commitments, and to exchange this information in a transparent manner. These measures need not be intrusive, or infringe upon sovereignty. They must, however, ensure that an accord is credible, and that we are living up to our obligations. For without such accountability, any agreement would be empty words on a page.
The responses of  developing countries, notably China and Nigeria, to President Obama's speech were  unfortunately predictable, given the rent-seeking game they are playing in the globe-trotting cocktail party known as the "COP" (for Conference of Parties to the UN Framework Convention on Climate Change). They rejected international monitoring as a violation of their sovereignty. As one member of the Nigerian delegation explained:
"This is disappointing," said Barr Bibobru Bello Orubebe, a member of the Nigerian delegation. "We expected Obama to provide leadership. But instead, he just keeps insisting on monitoring, and that intrudes or even undermines our sovereignty."
Hours after President Obama made his speech, a draft "Copenhagen Accord" was published, although it has not yet been signed by members of the COP. That accord obliges developing countries to "domestic measurement, reporting, and verification" (emphasis added). This commitment is, at best, only slightly better than nothing. In other respects, the draft accord does little  to move the ball forward. It recognizes the need for deeper cuts in emissions, but does not impose any new binding emissions reduction targets on either developed or developing countries. However, the existence of a "Copenhagen Accord" allows members of the COP to claim that this meeting was not quite an historic failure, which is all I suppose world leaders must mean when they refer to the Accord as "historic."

UPDATE: The Guardian attributes the following quote to Lumumba Di-Aping, Sudanese chair of the G77 group of 130 poor countries: 


[This] is asking Africa to sign a suicide pact, an incineration pact in order to maintain the economic dependence of a few countries. It's a solution based on values that funnelled six million people in Europe into furnaces.
Such outrageous comparisons have become so common in policy debates lately as to seem deplorably and depressingly normal - think health-care reform in the US. 

Thursday, December 17, 2009

Pollution and Property (Chinese Edition)

I am delighted to report that my Pollution and Property book (Cambridge 2002) has just been published in China (in Chinese) by Peking University Press. Here's the cover:


"Coasian Solutions"

I was asked to review a paper for an economics peer-review journal the other day, which included several references to "Coasian bargaining," an abhorrent phrase about which I've already posted (here). The article also referred to another phrase, "Coasian solutions," which, while not as abhorrent, remains mystifyingly vague to me. I've managed to come up with two equally plausible interpretations of its meaning:

1. A "Coasian solution" is simply a voluntary contractual arrangement to avoid or resolve some dispute over entitlements to resources.

2. A "Coasian solution" is a non-viscous liquid that reduces friction, e.g., eye drops.

I prefer the second interpretation because if the first is correct, then all contracts arguably constitute "Coasian solutions," rendering the phrase insignificant. The second interpretation at least has the value of noting that friction matters - in economics as much as in physics - which is something that Coase took pains to point out.

Wednesday, December 16, 2009

Tyler Cowen on the Liberum Veto

Over at Marginal Revolution, Tyler Cowen posts about the liberum veto, an institutional innovation of the Polish-Lithuanian Republic, which began sometime in the 14th century and lasted until Poland was partitioned by Russia, Prussia, and Austria-Hungary in the 1790s. The liberum veto allowed a single member of Poland's parliament, the Sejm, to block legislation and, eventually, to nullify all legislation previously adopted and adjourn the entire session of parliament simply by saying "Nie pozwalam" ("I do not allow it").

Tyler doesn't really comment on the institution of the liberum veto, but many commentators to his blog added color and content. As I have written extensively about Polish constitutional history, including the liberum veto, in the past, I can add some further information about it.

In contrast to what many, particularly Western European, historians have assumed, the liberum veto was not an inherently destructive institution that disabled governance in the Polish-Lithuanian Republic. In fact, the institution existed while the Polish-Lithuanian Republic was growing into Europe's largest country - at its greatest extent ranging from the Baltic Sea to the Black Sea - allegedly without fighting a single war of aggression. The map below shows Poland at its largest, after union with Lithuania.



Between the 14th and 16th centuries, Poland developed a system of elected (non-hereditary) monarchy, which was subordinate to a sizable nobility - Europe's largest as a percentage of total population. In terms of political rights, including voting rights, every member of the nobility (known as the szlachta) was equal, regardless of great differences in wealth. Every noble was entitled to sit as a delegate to Poland's parliament (the Sejm), and to vote on the election of new kings.

Among the many novel institutions of Poland's Sejm was the liberum veto, which for centuries was used mainly as a threat - something like a modern filibuster - to force parliamentary leaders to forge compromise solutions to avoid a deadlock. In addition, the use of the liberum veto was limited by other institutional features of Polish proto-democracy, namely the system by which delegates to the Sejm were selected and instructed. Delegates were sent by local or regional sejmiki (little parliaments) with specific instructions on how they were to vote on issues to be addressed by the Sejm. If they deviated from their instructions, the locality or region they represented was held not to be bound by the Sejm's decision. Because delegates were bound by their instructions, they could not simply threaten a liberum veto willy-nilly. They had to comply with their instructions.

It was only in the 17th century that the liberum veto turned into what the Polish legal historian Wenceslas Wagner labeled a liberum rumpo, which served to dissolve the entire Sejm. At about that same time, foreign powers began to buy off the great Polish magnates to interfere with Polish parliamentary processes, which led to a weakening of the Polish state and armed forces, to the benefit of those foreign powers, which ultimately partitioned Poland. The Polish state disappeared from the map of Europe from the end of the 18th century until 1920.

Gollier & Weitzman on Discounting under Uncertainty

The paper is here. Here is the abstract:

It is not immediately clear how to discount distant-future events, like climate change, when the distant-future discount rate itself is uncertain. The so-called "Weitzman-Gollier puzzle" is the fact that two seemingly symmetric and equally plausible ways of dealing with uncertain future discount rates appear to give diametrically opposed results with the opposite policy implications. We explain how the "Weitzman-Gollier puzzle" is resolved. When agents optimize their consumption plans and probabilities are adjusted for risk, the two approaches are identical. What we would wish the reader to take away from this paper is the bottom-line message that the appropriate long run discount rate declines over time toward its lowest possible value.
 I don't have the expertise to independently assess the paper's mathematical model, but the findings would support a change in the economic analysis of long-term federal environmental policies toward the use of discount rates that decline over time toward zero. Such a change would be consistent with policy in the UK, where HM Treasury already uses a schedule of declining discount rates. It is also consistent with the aggregate view of thousands of US economists, as reported by Weitzman in a 2001 paper (here).

Mini-conference

This afternoon, I'm heading to Bloomington for the "mini-conference," which the Workshop in Political Theory and Policy Analysis puts at the end of every semester. It is a wonderful institution which achieves two aims: (1) it gives graduate students the opportunity to get high quality feedback on their works-in-progress, while (2) acculturating them to the unique and slightly bizarre world of academic conferencing. Instead of having the students (and visiting scholars) present their own papers, their papers are presented by other graduate students or faculty members from various social science departments at IU. This afternoon, for example, I am presenting and commenting on a paper by graduate student Frederik Eisinger  on "Payments for Ecosystem Services in a Common-Property Context: A New Opportunity for Forest Communities?"

Other papers at this semester's mini-conference cover topics ranging from rural development in Tajikistan, and heritage conservation in Hong Kong to Charter Schools in the US and more theoretical papers on the robustness of institutional structures, and adaptive capacity. Attending the mini-conference is great way to learn a lot about a lot of different topics in a short period of time.

Tuesday, December 15, 2009

Is the Film Better than the Book?


The new George Clooney film, "Up in the Air," has landed six Golden Globe nominations, including for best picture drama. I have not seen the film, but I did read Walter Kirn's book of the same title. It was a reasonably fun read with some none-too-subtle social commentary. But I did not consider the book particularly important or memorable. Perhaps this is a case where the film is better than the book? Unfortunately, I am unlikely to answer that question, as I see very few films, and this one would not be at the top of my list.

The Biology of Debt

My esteemed colleague, R. George Wright, points me to a new paper on SSRN by Jan-Emmanuel De Neve and James H. Fowler, claiming a link between genetics and propensity to indebtedness:
Having one or both MAOA alleles of the low efficiency type raises the average likelihood of having credit card debt by 7.8% and 15.9% respectively. About half of our population has one or both of the MAOA alleles of the low type. The results suggest that economists should integrate innate propensities into economic models and consider the welfare consequences of possible discrimination by lenders on the basis of genotype.
I don't feel qualified to adjudge the analysis in the article, but the potential policy implications are fascinating and somewhat scary. Should those with the low-efficiency MAOA alleles be entitled to debt relief, gene therapy, or both? Should genetic analysis become a feature of creditworthiness tests? Should those with a genetic propensity to indebtedness be charged higher interest rates to offset the genetic propensity?

Needless to say, a lot more research is required into the alleged links between genetics and indebtedness before any potential policy implications are seriously considered.

A Writing Day Experiment

Yesterday, I finished prepping a presentation for Wednesday in Bloomington, and completed a paper review for a peer-review journal. Which means that today is a writing day, but with a couple twists.

First, I plan to write at school, instead of at home. I'm almost always more comfortable writing at home, but school is very quiet these days, and my office there is a bit less cluttered than my office at home right now. I can bring to school a stack or two of research for the chapter I'm writing without fear of losing them among other papers on my desk.

The second twist - and this is a bigger one - I'm starting a chapter without having a clear idea of its structure; it may ultimately turn out to be two separate chapters, but I won't know until I get pretty far into it. Normally, when I sit down to begin drafting a new chapter for a book or a new article, it is already sketched out at a pretty high level of detail in my head. On this occasion, I have only the broad contours of what I want to write in my head. That should make the writing process both longer and more difficult. Perhaps that is why I've managed to put off starting this new chapter for so long - until today.

If I can make a good start today - get five or ten pages written - I would be elated. But there's at least an even chance that I will make one or more false starts before getting the chapter moving in the right direction. What's true of policy is equally true of the writing process: getting the direction right is job #1.

Monday, December 14, 2009

Joe Lieberman was for Medicare Buy-In Before He was Against It



Hat tip: Brad DeLong

Chinese News Animation of Tiger Woods and His Wife (Very funny)

What Kind of Public Good is Asteroid Deflection?

Alex Tabarrok, at Marginal Revolution, has an interesting blog on asteroid deflection as a public good. He notes that neither markets nor governments are supplying it, even though the risk from dying from an asteroid strike are approximately the same as dying in a plane crash - which countries and markets spend lots of money to avoid - and a large asteroid strike could kill billions, or everyone.

Alex notes that the US spends millions on the detection of near earth objects; indeed, it is the only country with a substantial research program to identify possible sources of asteroid strikes before they occur. Detection is, of course, a necessary prerequisite to deflection. Thus, his initial assertion that no government is supplying asteroid deflection is a bit misleading. Moreover, the fact that the US is investing substantial sums in  asteroid detection and on advanced propulsion systems that might be used to deflect asteroids in the future, raises an important question that Alex does not answer: why is the US moving at all in the direction of unilateral provision of a global public good?

An excellent answer to that question is provided in Scott Barrett's superb book, Why Cooperate? The Incentive to Supply Global Public Goods (Oxford 2007). In it, Scott distinguishes five types of global public goods: "single best effort"; "weakest link"; "aggregate effort"; "mutual restraint"; and "coordination." This is not the place for a complete explication of those categories, but, for example, climate change mitigation is an "aggregate effort" public good because its ultimate success depends on the total efforts of all countries. By contrast, large asteroid deflection is a "single best effort" public good because it may be in the interest of one very wealthy country, such as the US, to supply it, even if no other country cooperates. In other words, asteroid deflection may not require international collective action at all.

Sunday, December 13, 2009

In Memoriam: Paul Samuelson



Paul Samuelson, perhaps the single most influential economist of the 20th century (with all due respect to John Maynard Keynes), passed away today at the age of 94. No one was more responsible for the formalization of economic methods, which revolutionized the way economics was, and is, taught (for better and for worse). The New York Times has the story here.

One of the Best Kept Secrets on the Web












For those who like jazz, KSDS is awesome. But there is one caveat: if you listen to it at work, as I do, you will sometimes find yourself staring blankly at the computer screen, nodding your head and tapping your toes.

Hat tip: Dr. David Wilkes

A Good Day for a Premier

The following three great musical works had their premier performances on December 13:


Berlin, 1895: Gustav Mahler's Symphony #2 (Resurrection)










New York, 1928: George Gershwin's "An American in Paris"












Brussels, 1930: Igor Stravinsky's "Symphony of Psalms"

Do You Know This Famous Novelist?


If you don't know from the photo, here's a hint that will make it easy to figure out using Google: He authored one of my very favorite short stories - one of the best ever written by anyone - "A Perfect Day for Banana Fish."

Two Big Games Today

Liverpool v. Arsenal: A win over Liverpool would thrust the Gunners right back in the thick of the title hunt, especially since Man U lost yesterday and Chelsea tied. Arsenal are still struggling to score goals in the absence of Robin van Persie. But so too are Liverpool - normally one of the "Big 4" - who are mired in mid-table at the halfway point of the season. The Reds will, however, get a boost for this game as world-class striker Fernando Torres is returning from injury. Most importantly, if Arsenal win this match, I'll have bragging rights over my colleague Jeff Cooper, who is a Liverpool fan. However, I'm predicting a draw.

UPDATE: I'm happy to say I was wrong. Arsenal win, 2-1.

Colts v. Broncos: The undefeated Colts will get a test today from a very good Broncos team. The Broncos pose special challenges for the Colts because (a) they have a set of very tall receivers and (b) an excellent defense. On the other hand, the Broncos have not faced a team with the overall team speed of the Colts. On paper, at least, it should be a close game. But I don't see the Colts losing at home, especially when that win would secure home-field advantage throughout the playoffs.

Saturday, December 12, 2009

Bicycle Therapy for Parkinson's Patients

This story at the Daily Beast reports on the result of a small study by researchers at the Cleveland Clinic, finding that individuals suffering from Parkinson's Disease can obtain substantial relief from symptoms by high-candence pedaling on the back of a tandem bicycle.
  A small eight-week study was launched to gauge the effects of forced exercise. It sounds more extreme than it is—“forced exercise” is simply tandem riding in which patients are required to pedal 80-90 RPM. The effect on Parkinson's symptoms was impressive: There was a 35% improvement in motor functioning for the patients who did the forced exercise compared with those exercisers who pedaled a stationary bike at their own pace.... The improvement lasted for four weeks after the cycling sessions ended, although it tapered gradually over time....

Tim Casady's New Ride


Look for Tim's new Dogma on Nebo Ridge training rides and local races in 2010. You can buy your own Dogma from Nebo Ridge Bicycles in West Carmel, Indiana.

The New Team Radio Shack Trek














Sooo much better than those 2009 Team Astana Treks! ;-)

Burckhardt, In Praise of Dilettantism

In these days of ever-increasing academic specialization, when there is no such thing as a general "expert" even in the seemingly narrow field of Environmental Law - Clean Air Act experts disclaim knowing much about the Clean Water Act, and vice versa - it is especially difficult for scholars to embrace truly interdisciplinary research for fear of exposing themselves as amateurs or, worse, dilettantes. The Merriam-Webster Online Dictionary defines a "dilettante" as "a person having a superficial interest in an art or branch of knowledge." No serious scholar would want to be described as such.

Fortunately, for those of us who aspire to real, non-superficial interdisciplinary research, the great Swiss cultural historian, Jacob Burckhardt, provided a splendid, if not complete, defense more than 100 years ago:

     Dilettantism owes its bad reputation to the arts, where, of course, one is either nothing or a master who devotes his entire life to them, because the arts demand perfection.
     In learning, by contrast, one can attain mastery only of a limited field, namely as a specialist, and this mastery one should attain. But if one does not wish to forfeit the ability to form a general overview - indeed, to have respect for such an overview - then one should be a dilettante in as many fields as possible - at any rate, privately - in order to enhance one's own knowledge and the enrichment of diverse historical viewpoints. Otherwise one remains an ignoramus in all that lies beyond one's specialty, and under the circumstances, on the whole, a barbarous fellow.
Jacob Burckhart, Weltgeschichtliche Betrachtungen (1905).

Friday, December 11, 2009

Responding to "Climategate"

Two excellent articles have appeared in recent days defending climate science against spurious accusations that all of climate science has been put in serious doubt by allegations of fraud based on e-mails hacked from servers at the University of East Anglia.

Two days ago, Alan Leshner, Chief Executive Officer of the American Academy for the Advancement of Science and Executive Publisher of the journal Science, published this op-ed in the Washington Post. In it, he insists that climate science remains "clear," and urges that:
 The public and policymakers should not be confused by a few private e-mails that are being selectively publicized and, in any case, remain irrelevant to the broad body of diverse evidence on climate change. Selected language in the messages has been interpreted by some to suggest unethical actions such as data manipulation or suppression. To be sure, investigations are appropriate whenever questions are raised regarding the transparency and rigor of the scientific process or the integrity of individual scientists. We applaud that the responsible authorities are conducting those investigations. But it is wrong to suggest that apparently stolen emails, deployed on the eve of the Copenhagen climate summit, somehow refute a century of evidence based on thousands of studies.
Today, in this article published  in The Guardian, Myles Allen reminds us that no one has yet pointed to an actual error in any published paper or dataset stemming from the alleged fraud. The results of climate science over the last decade remain robust and convincing.

A Simple and Straightforward Explanation of Carbon Taxes v. Tradable Permits

The Basic Economics of Carbon Permits Versus Carbon Taxes

Hat tip: Environmental Economics

Draft Negotiating Document for Copenhagen

The Ad-Hoc Working Group on Long-Term Cooperative Action under the United Nations' Framework Convention on Climate Change today released a draft negotiating document, based on its assessment of the "temperature" of the parties currently meeting in Copenhagen. The Washington Post has made a pdf file of the negotiating document available (here). The document is usefully brief, and provides clear options for the parties to choose from on issues such as the targeted ceiling of additional warming and emissions reductions from 1990, 2005, or 2010.  The document does not, however, suggest specific emissions reduction targets for individual parties. More importantly, the document does not treat any institutional issues, other than developed country financing for mitigation and adaptation in developing countries. As I have consistently argued, the institutional issues, especially those relating to instrument choice, are as or more important than target setting in climate policy. Targets will be meaningless if parties are unable to put effect, reliable, and enforceable institutional mechanisms in place to achieve them.

Cezanne in Cambridge, Courtesy of Keynes

This is my favorite painting in the Fitzwilliam Museum, Cambridge, which has a truly impressive collection thanks in large measure to the donations of many Cambridge dons, who amassed impressive private collections during their lives. Not least among them, John Maynard Keynes, who owned this gem of a Cezanne:


I Love Libraries

Anyone who loves libraries, as I do, will enjoy this Compendium of Beautiful Libraries. Here is a photo (not from that source) of the new library at Gonville & Caius College, Cambridge (built in the late 1990s), which is a particularly pleasant place to read and study. It is built on top of the old Squire Law Library, which contains manuscripts dating back to the 14th century and beyond.


Thursday, December 10, 2009

Morning vs. Evening Exercise

I knew I had a good reason for staying in bed, rather than going on early morning bike rides. The New York Times reports (here) on research showing that exercising in the late afternoon or early evening is both more efficient and less dangerous (at least for the heart) than morning exercise. Bottom line: Sleep in, and exercise later.

The Wit of a Cambridge Don

CP Snow reporting on a fictional conversation during Christmas dinner at a fictionalized version of Christ College  in The Affair, book eight of Strangers and Brothers, p. 50):

    Smoothly he asked Winslow if he had been to any Christmas parties.
    'Certainly not, my dear Orbell.'
    'Have you really neglected everyone?'
    'I gave up going to my colleagues' wives' parties before you were born, my dear young man,' Winslow said.
    He added: 'I have no small talk.'
    He made the remark with complacency, as though he had an abnormal amount of great talk.'

Lin Ostrom's Nobel Prize Lecture

For those who were unable to watch it live, you can now view the lecture at your leisure. Oliver Williamson's Nobel lecture was also quite interesting, and you can view it here.

Wednesday, December 9, 2009

It's Easy to Raise Transaction Costs

















Hat Tip: telegraph.co.uk

The Indy Star Editorial Page

Today, the Indianapolis Star published an editorial (here), which argues that the US EPA should not regulate climate change, nor should Congress do so unless and until an international agreement is obtained that commits other major emitting countries, such as China, to enforceable emissions reduction targets. This is not an untenable position, although I do not agree with it. However, the editorial board's arguments in support of its position range from dubious to disingenuous.

First, they claim that the timing of the EPA's endangerment finding for greenhouse gases is a "blatantly political" maneuver designed to put pressure on Congress to enact climate legislation. This is certainly correct - one would have to be naive not to appreciate the timing - but, then, what large-scale policy decisions in Washington are not blatantly political and politically timed?

Next, the editorial writers argue that a unilateral US commitment to reduce emissions would be akin to unilateral disarmament. But nothing would prevent the US from "rearming" (as it were) in the event that other countries did not soon follow suit. Moreover, other countries, including China, are not likely to follow suit until the world's #1 contributor (by far) to the existing stock of greenhouse gases in the atmosphere shows some leadership on the issue. Just as it is easier to catch flies with honey than vinegar, so it makes more sense for the US to make a substantial, but modest, emissions reduction commitment, with a promise of further cuts if other countries follow suit. This is the approach the European Union already has taken, promising 20% cuts by 2020, rising to 30% in the event of commitments from other countries.

Speaking of the European Union, the editorial in the Star asserts that the EU's own unilateral cap-and-trade program "is widely viewed as a failure." By whom? It is true that in Phase I of that program, from 2005-2007, emissions increased on net, but that was actually foreseen from the start. Phase I was simply a "pilot" phase, in which the EU was establishing institutions that would lead to actual emissions reductions, in accordance with the EU's Kyoto targets, in Phase II (2008-2012). To label the program a failure because of the outcome of Phase I is like arguing that a steak is too rare after it's been cooked for only 5 minutes.

As for the positions of Senators Ethanol, I mean Lugar, and Bayh, both of whom the Star lauds for their sensible positions on climate policy, one only has to examine a list of their campaign contributers to realize that their positions are no less "blatantly political" than the timing of EPA's endangerment finding.

Finally, the Star editorial board must know better than to argue that the cap-and-trade legislation currently before Congress should be defeated because environmentalists, including NASA's James Hansen, would prefer a carbon tax. As I noted in another blog posting just yesterday, I too would prefer a carbon tax, if I thought that there was a realistic prospect that such a tax could be enacted. But there is no real chance of Congress enacting any kind of carbon tax. The alternative to existing cap-and-trade legislation is nothing, and I find it difficult to believe that the members of the Star's editorial board do not know that. If they do know it, then basing their argument against existing legislative proposals based on the preference of many environmentalists (and economists) for a carbon tax is disingenuous. One might even call it "blatantly political."

Bottom line: If I subscribed to The Indianapolis Star (which I don't), I would cancel my subscription. If I regularly read the Star's editorial page (which I don't), I would stop doing so immediately. No one's opinion on climate policy or any other issue should be influenced by editorial conclusions that are based on such shoddy arguments.

FDR, the Failed Child Labor Amendment, and Court Packing

My esteemed colleague, Gerard Magliocca, who blogs at Concurring Opinions, is one of the most innovative, outside-the-box, and consistently interesting legal historians in the country. His articles and books are always  novel, often counter-intuitive, and invariably entertaining to read.

I highly recommend Gerard's newest paper on "The Child Labor Amendment and the Court Packing Plan" (available here) in which he argues that President Roosvelt's support for the Child Labor Amendment was both belated and strategic. The President evidently believed that the Amendment would fail to be ratified by the states, and that its failure would provide ammunition in support of his efforts to "pack" (that is, add several new Justices, of his picking) the Supreme Court. One of his main arguments for increasing the size of the Court was his contention, not well supported by the empirical evidence, that it was too difficult to Amend the Constitution through the Art. 5 process. Ultimately and somewhat ironically, Justice Robert's [thanks to John Q. Barrett for the correction] "switch in time that saved nine" mooted both the court packing plan and the Child Labor Amendment; instead, Congress enacted a Child Labor statute that the realigned Court upheld.

Doing the Math, Badly
















Hat tip: Alex Tabarrok at Marginal Revolution and J-Walk Blog.

Tuesday, December 8, 2009

Would You Pay a $36,000 for this Bike (at Harrods)?























Hat tip: Bikeradar.com

How Would Adam Smith Have Decided Pierson v. Post?

At the University of Glasgow, Adam Smith lectured not only about moral philosophy, but also about jurisprudence. The following comes from Smith's Jurisprudence lecture notes for 1762-3:

[I]f one who has a right to hunt starts a deer, and when he is in pursuit another comes in and takes this deer before he [has] given over hopes of catching him, this 2d person appears evidently to have acted contrary to good manners and may accordingly be punished by the forest laws. It can not however be accounted a breach of property, as that can not begin till the beast is actually brought into the possession of the pursuer.

Adam Smith, Lectures in Jurisprudence (Oxford: Clarendon Press, 1978), p. 82.

Economists Are Not Climate Scientists, and Vice Versa

I have often lambasted economists and other social scientists who pretend to understand climate science as well or better than do climate scientists. This time, the shoe is on the other foot.

In yesterday's NY Times (here), climate scientist/doomsayer James Hansen published an op-ed in which he pontificated on climate policy, endorsing a carbon tax plan known as "fee and dividend" over "cap-and-trade." I have no problem with this as a matter of theory. In fact, in theory, I agree that an upstream carbon tax would work better than a cap-and-trade regime. But not for Hansen's reasons. He complains that a cap does not create any incentives to reduce emissions below the level of the cap, which is true. What he fails to understand is what Marty Weitzman showed us back in his famous 1974 article on "Prices vs. Quantities": a tax is really nothing more than a quota set at the point where marginal abatement cost equals the marginal cost of the tax.

The only real reasons to prefer a carbon tax over cap-and-trade have to do with lots of things Hansen does not understand, including relative elasticities of supply and demand, whether having certainty about the quantity emitted or the price (and uncertainty about the other) is more important to the policy maker, expected market distortions, relative administrative costs, and political feasibility. With respect to the last consideration, Paul Krugman (here) gets the final word against Hansen:

[W]e have a real chance of getting a serious cap and trade program in place within a year or two. We have no chance of getting a carbon tax for the foreseeable future. It’s just destructive to denounce the program we can actually get — a program that won’t be perfect, won’t be enough, but can be made increasingly effective over time — in favor of something that can’t possibly happen in time to avoid disaster.

Put simply, climate scientists should stick to science, and leave to social scientists the job of designing and implementing policies in light of that science. This is not to say that climate scientists are incapable of contributing to policy discussions on climate change; but, just as social scientists should be modest about their role in climate science, so should climate scientists be modest about their role in climate policy. But modesty has never been James Hansen's strong suit.